Oil & Gas

Tanzania is set to finalize the Host Government Agreement (HGA) for its $42 billion liquefied natural gas (LNG) project within the next two weeks. This agreement will establish the essential legal and fiscal framework required to reach the final investment decision (FID), a critical milestone expected to accelerate the project’s development. Deputy Prime Minister and Minister for Energy, Doto Biteko, confirmed the negotiations are nearing completion, attributing progress to President Samia Suluhu Hassan’s strong interest in finalizing the deal. The finalized document will soon be submitted to relevant authorities for approval, moving the project closer to preparatory engineering phases before the FID in 2025.

The LNG project, located in the Likong’o area of Lindi Region, has experienced delays due to complex negotiations and regulatory concerns. Earlier this year, the Attorney General’s Office requested improvements to the agreement, causing further revisions and consultations before finalization. Despite these hurdles, both parties have agreed on a majority of key issues, signaling a positive outlook for the deal’s completion. President Hassan has emphasized the strategic importance of the project, stressing its potential to generate significant capital and revenue for Tanzania while ensuring benefits reach residents of Lindi and Mtwara regions.

In addition to economic gains, the project aims to empower Tanzanians to fully participate in the energy sector. President Hassan advocates updating laws and regulations to attract private sector investment, describing the LNG venture as "massive, strategic and special." She urges all stakeholders to maintain a flexible, give-and-take approach in negotiations to secure mutual success. Tanzania’s substantial natural gas reserves, estimated at 57 trillion cubic feet, are mainly located offshore near Songo Songo Island and Mnazi Bay, positioning the country as a key player in the regional energy landscape.

Once implemented, the LNG project is expected to bolster Tanzania’s energy security and economic growth, unlocking new opportunities for jobs and industry. The project timeline, directed by the President, is designed to ensure readiness for production commencement shortly after the FID in 2025. With strong government backing and a clear legal framework in place, Tanzania is poised to leverage its vast gas resources for sustainable development and regional influence in the energy sector.